‘We have to be relevant today’: As Chinese brands GWM, MG and BYD make inroads in Australia, Honda boss said brand loyalty isn’t dead

Brand loyalty is not dead and enduring carmakers such as Honda can still attract new buyers in the face of fresh competition from China, according to the company’s local boss.

Like all so-called legacy carmakers, Honda is now facing a much broader competition set than at any point in its long history, with the influx of Chinese brands turning the market on its head. Honda also continues to fight for space in the market against other popular makes.

A raft of new, largely Chinese entrants have quickly stolen buyers from existing brands from Japan, South Korea, the US and Europe, leaving concerns from some in the industry that there’s no such thing as brand loyalty anymore.

Honda Australia President and CEO Jay Joseph said he doesn’t buy this theory.

“I find it hard to believe that something as intrinsic as brand trust would be dead. I don't think that just flatlines and falls off of a cliff,” he said at a recent media event.

New entrants including BYD, GWM, MG, Geely, Chery and more than a few others have taken a sizeable chunk of sales, with the former three regularly battling for space in the top 10 best selling brands list each month. Meanwhile, Chinese made cars (including models from non-Chinese brands that build cars there) currently make up 17 per cent over overall sales so far this year.

Joseph acknowledged that Honda has work to do in ensuring it not only maintains loyalty from existing customers while celebrating its heritage, but also in attracting new buyers, pointing to future models as an example.

“We have to be relevant today. No question about it,” he said. “People are attracted to the features and to the flash and all of that. So we definitely have to be competitive on that front, too. We can't just rest on our laurels and all the things that we achieved in the past. We have to be relevant today, for sure.

“And I think, you know, with 0 series, you can see a whole different direction in styling, a massive departure, and taking chances with that. Maybe that doesn't appeal to everybody. For the people who it does appeal to, it's really sexy, and that's what we need.”

Honda’s 0 (Zero) series cars are a pair of electric vehicles already shown in concept and prototype guise that will come to production next year. There’s a sleek saloon and a similarly sized SUV with sharp design and a retro-futuristic vibe. The 0 series is expected to launch in Australia in 2027.

Joseph said Honda occupies “a unique space as a premium, mainstream brand”, adding that beyond price and positioning, it refers to how Honda treats its customers, something he says newer brands struggle with.

“It's in our corporate philosophy that we provide products of high value and high quality to our customers, but we've earned this niche of not just being a mainstream brand that's just selling volume on price, but because of the inherent qualities and unique qualities of our products, we've earned a spot where they are premium mainstream products.

“Honda is not trying to reposition itself as a luxury brand. That is not our aspiration. In the States, we have Acura that does that quite well. But as far as the space that we occupy here, we don't behave like a volume brand because we don't need to, because our value proposition is not just the product and not just the price, but it's how we take care of our customers.

“If you're looking at one of the newer entrants, we read stories all the time about how you might have a repair delayed for weeks or more because the part you need isn't available. And I can't say that we're perfect about this, but we're pretty damn good where we've got a well established national network, we can get most any part to any of our dealers, within a day and get that customer taken care of and back on the road, whether it was routine maintenance or something unplanned.

“That's the trust that we have earned with our customers, and that we seek to maintain, and that's worth something, not to mention the high resale value.”